Dear Team, I am independent consultant live in India,want to buy a car, need the following doubts cleared.. Is Deprication claimable--at what percentage. Is interest paid on car loan claimable 100% Is service cost claimable 100% Is fuel, Insurance and drive cost can be claimed. If all the above can be claimed, is it advisable to go for a luxury car. Is new car or second hand car recomended. If i sell my house before 5 years, is my tax (80c) reversible.
First of call car must be used for business purpose.
Depreciation is charged at 15% if car used for whole year.
Interest paid allowed as deduction if car used for business
All related expense will also be allowed.
What 80C deduction are you talking about for house please clarify.
Hope you find the information helpful, if yes do rate if 5 and provide your valuable feedback for my improvement.
Thank you.
How should prove that the car is used for business purpose. I bought a house which is 4 years old, if I sell it(within 5 years) is the principle and interest which I claimed in IT is it reversible.
1) If the car is used for business purposes then you can claim the below expenses
- Depreciation@15% on WDV (Written down value) basis
- Interest paid on car loan
- Repair & Maintenance (supported by proper invoice)
- Fuel, Insurance and driver cost (supported by proper invoice and voucher)
2) In respect to sale of house before 5 years, only principal amount claimed as deduction u/s 80C would be deemed as income in the year of sale
For detailed discussion you may opt for phone consultation
Hello,
If you sell the house before completing 5 years, the tax benefits claimed under Section 80C be reversed.
Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.
Thank you.
Shubham Goyal
Hello Sir/Madam,
Hope you are doing well!!
in the above situation my views are as under :
in properietoership concern if vehicle used for business purposes then yes all the above exp. are allowed as business expenses, business purpose means use for business meetings, there are no mechanism to confirm whether is wholly used for business or not thus in generall when our case selected for tax scrutiny then Income tax officer add back 15-20% of exp. as personal expenses.
Depriciation rate as per income tax act is 15% annually, if purchased after 02 october then 7.5% depriciation allowed for that period (day wise depriciation not count in income tax) 7.5% or 15% depends on purchase or put to use date.
new car or second hand its depends on you choice, same in luxury or not, law is silent on this, actually in practical this is depends on your business profile and scale.
House property question :
If the house owner sells the house within five years after acquiring possession then as per section 80C regulations, the entire deducted amount claimed in previous years will get reversed and be treated as income for the next financial year.
Hope above will help you.
It is a self declaration. AO might disallow a certain percentage as per various case laws.
Please note that if it is a business asset you might need to pay GST if you sell it.
Only principle is reversible as mentioned above.